The passenger car market in January increased by 77%, to 80.2 thousand cars

The passenger car market in January grew by 77% compared to last year, but was below the pre-crisis level. Sales at the beginning of the year continued to be stimulated by discounts and promotions from importers and dealers left over from last year, but demand still remains limited due to the effect of the high Central Bank rate. In February, shares even increased, dealers say. But there is no optimism about increasing demand in the market, including due to exchange rate dynamics and the reluctance of some clients to spend money on cars under the current deposit conditions.

Sales of passenger cars in January increased by 77.3%, to 80.2 thousand units, Avtostat calculated based on PPK data. Such active growth is associated with the low base of last year, caused by a fall in car production in the Russian Federation and imports that have not yet recovered. The market returned to pre-crisis sales figures only in the summer of 2023, but already in the fall, against the backdrop of an increase in the Central Bank rate, the sale of cars slowed down again. Compared to January 2022, sales were lower by 6.7%, and compared to December 2023 – by 32.9%.

The beginning of the year is traditionally a low season in the car market, but the demand for new cars in January exceeded expectations, says Andrey Kamensky, marketing director of Avilon AG. Sales were facilitated by the fact that most of the promotions that were relevant last year continued to apply to cars, including New Year’s ones, for example, discounts for credit and trade-in, direct support from the importer, as well as various dealer offers, explains Mr. Kamensky. In addition, he continues, “buyers’ attention is attracted by new products that continue to hit the market in large quantities.” Anna Utkina, director of communications for Avtodom and Autospetscenter, also says that demand was stable, but moderate, “for most Chinese brands there are now really profitable support programs.” Boriskhof says that they were even able to close January above internal plans. “Some brands in our portfolio showed December sales levels,” they noted.

The market leader is still Lada – sales of passenger cars of the brand amounted to 22.3 thousand units, which is 26.4% more than a year earlier. AvtoVAZ itself, using dealer data, gives lower sales – 20.8 thousand units (an increase of 19.3%).

The best seller among foreign cars, according to Avtostat, was Haval (sales increased by 2.3 times, to 9.6 thousand units). The remaining places in the top 5 also belong to brands from China: Geely (2.5 times growth, to almost 9 thousand units), Chery (by 59.5%, to 8.8 thousand), Changan (growth by 16 .5 times, up to 4.9 thousand).

The leaders in the model rating are the most budget-friendly Lada Granta (10.2 thousand units) and the mid-mass segment sedan Vesta (5.4 thousand). At the same time, sales of the former are reduced by 14.2%, while Vesta is growing 13.4 times due to a low base. Before the crisis, Lada Vesta was AvtoVAZ’s best-selling model, but its production was suspended in 2022, and in January 2023, only the remnants from warehouses were sold. Vesta production resumed only in the spring of 2023. The most popular foreign car remains the Haval Jolion crossover (sales growth 2.7 times, to 4.3 thousand units) – this is the only model of a Chinese brand in the top 10 of the market that is produced in the Russian Federation.

Avilon expects stable buyer interest to continue in February.

Boriskhof adds that in February, most brands increased support for sales of cars produced in 2023. Nevertheless, the key factors for the market are exchange rate uncertainty and a high key rate, they say, “the first affects prices, the second affects demand.”

Anna Utkina believes that demand in February may be more active than January, but also points out that everything will depend on external factors. “The Central Bank’s decision on the key rate is now the main one,” she explains. “Expensive car loans and favorable deposit offers are certainly holding back buyers.” However, a year earlier in February, only 56.2 thousand new passenger cars were sold, so it is very likely that this month the car market will show growth due to the low base effect.

Olga Nikitina